PRICING DECISIONS TATA NANO

PRICING DECISIONSTATA NANOBY:PRASHANT BHARDWAJAMIT JAINARU TANEJAMOHIT VERMASHUBHAM JAINPRICING AS A MARKETING STRATEGYPricing is an integral part of the 4Ps of Marketing Mix.Price is the amount paid by the buyer to the marketer in exchange of the product received or services rendered.Effective pricing is extremely important for survival and growth in the marketplace.Price can be used as a promotional tool by offering discounts on the MRP of the product.PRICE DISCRIMINATIONPrice discrimination is the practice of charging different prices in different markets, for achieving the best possible revenues and profits.In order to earn a better return on investment, a marketer may resort to price discrimination.Price discrimination can provide a balance point where maximum profits corresponds with the quantity that can be sold at that price. PENETRATION PRICINGPenetration strategy charges the lowest price in order to capture maximum market share when there is high competition in market.This strategy works better when price elasticity of demand is higher.Penetration pricing is done to fight competition in an effective manner.PRICE SKIMMINGSkimming is the technique of charging a higher price initially and lowering it subsequently to attract customers from the next lower socioeconomic category.This strategy is mainly applicable for newer products.DISCOUNTINGIn discounting strategy, a product is priced higher and then discounts or coupons are offered.Discounting is used so that customers can get their next purchases at a lower price.Discounting is a form of sales promotion.

GEOGRAPHICAL PRICINGGeographical pricing is advantageous when cost of transportation accounts for a significant part of the variable cost.The company declares an ex-factory price, on which specific additional expenses related to transportation, are charged for specific locations.

PSYCHOLOGICAL PRICINGPsychological pricing strategy is commonly used by marketers in the prices they establish for their products.Psychological pricing is used to make a certain impact on the psychology of the buyer.For ex- the prices of Bata shoes ends with a digit 9 (rs. 799).PRICE LININGIf specified quantities are to be sold at a specific price, it is called price skimming.This strategy is often applied in the case of FMCG products.A marketer uses this strategy to promote the sales of the product.PRICE LEADERSHIP When price is the base of competition in market, the companies have to be alert and respond to any change.When one company sets off changes in price while others follow it, the company initiating price change is called price leader.This strategy is followed when a company has substantial market share.

10MONEY FOR VALUE PRICINGPremium brands charge money for value and do not follow competitors pricing.In this situation, the emphasis is on product differentiation rather than price.The marketer fulfills the need of a niche market , which is ready to pay a premium if their demands are met.Thank You.